Is a Federal Crackdown on Cannabis Coming?

States are legalizing marijuana usage in droves, but the federal juggernaut, along with cannabis crusher Attorney General Jeff Sessions, remains a big risk for the growing business.

And that risk just kicked up a few notches.

As you know, medical marijuana is operating as a sort of grey area legally. While still banned at the federal level, the Justice Department has been blocked from enforcing existing law by Congress since 2014.

In May of that year, an amendment passed stopping the department from spending any money to stop medical marijuana legalization in the United States… but it has a sunset clause.

It if isn’t renewed, its provisions no longer operate and the feds are free to go into action, if they choose.

Since then, the amendment has been renewed several times. This year, the bill was renewed in May, when it was included in a massive spending bill. It was set to expire on Sept. 30… only to be renewed on Sept. 8 as part of an emergency hurricane aid bill.

Right now, the feds’ hands are tied until Dec. 8.

However, it remains to be seen if a longer-term renewal will happen. If that doesn’t happen, Sessions is freed to enforce his anti-pot agenda.

But even if this occurs, I don’t expect enforcement to hurt medical cannabis plays.

Unlike much of the recreational cannabis industry, most medical cannabis companies function as traditional biotechs, pursuing market access along the traditional pharma track. They follow the letter of the law when it comes to drug therapy approval by:

  1. Running clinical trials.
  2. Going to the FDA for marketing approval.

Even if the feds crack down, they won’t be stopping FDA-approved therapies that happen to be cannabis-derived.

In fact, renewed federal enforcement could even help boost value in this sector by taking out alternative competition that are selling OTC plant matter, extracts or other forms of the plant.

In other words, an aggressive Jeff Sessions would light a fire under biotech shares, despite being an awful scenario for many other cannabis-based businesses.

I predict this state of affairs will be short-lived, however, if it does happen a DEA crackdown on medical cannabis dispensaries across the country would stoke real outrage.

Support for medical marijuana is topping 94% in public opinion these days, a really amazing number.

With banning would come backlash — and pressure on legislators in Congress to solve the problem.

A number of legalization bills are currently poised to make their way through the labyrinthine legislative process.

For example, one recent bill set to be introduced will help spur medical marijuana research. Sessions and others would be hard-pressed to impede these developments without creating a significant uproar.

As I said, I expect no negative impact on Big Pharma companies working to develop FDA-approved, cannabis-based therapies since they will have the backing of a well-renowned federal institution.

We’ll be keeping a close eye on developments in the meantime, and as more information comes to light, I’ll be right back here to tell you how to make the most of things.

For Tomorrow’s Trends Today,

Ray Blanco
for The Daily Reckoning

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Ray Blanco

Ray Blanco is the editor of Technology Profits Confidential as well as Breakthrough Technology Alert, FDA Profit Alert, and Technology Profits Daily. Ray has been with Seven Figure Publishing since 2010. In 2019, his closed positions in Technology Profits Confidential outperformed the S&P500 by 50%.

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